Robinson, Wolas & Hagen v. George Gardner

Appellants, attorneys for a Chapter XI debtor, appeal from an order denying review of a referee’s order refusing to allow them compensation for services rendered in an unsuccessful effort to secure an arrangement with creditors. We affirm.

Appellants, representing Raymond Development Industries, Inc. (“Debtor”), prepared and filed for the Debtor a voluntary petition for an arrangement pursuant to Chapter XI of the Bankruptcy Act, 11 U.S.C. §§ 701-99 . After a referee and a receiver had been appointed, appellants expended substantial time seeking to negotiate a plan of arrangement. The negotiations failed, and the Debtor was thereafter adjudicated a bankrupt.

Appellants filed an application for an award of $22,500 for services rendered to the Debtor under Chapter XI proceedings and for a nominal sum to reimburse them for out-of-pocket expenses. The referee refused to award any compensation for work done in connection with the abortive attempt to secure an arrangement, holding that section 337 of the Bankruptcy Act, 11 U.S.C. § 737 , as it then read, gave him no authority to make such an award. Appellants’ effort to overturn the referee’s decision in the district court was…